Western Price Survey
January 12, 2018
Energy use and prices—which skyrocketed in late December and early this month with colder weather across the United States—slid this week as temperatures moderated.
The deep freeze led to several records in recent weeks, according to the U.S. Energy Information Administration
The net withdrawal from national natural gas storage for the two weeks since Dec. 22 was 565 Bcf, breaking the prior two-week record of 510 Bcf, recorded in January 2010.
Working natural gas in storage was 2,767 Bcf as of Jan. 5, according to the EIA. This is a net decrease of 359 Bcf compared to the previous week, besting the previous record of 288 Bcf, set in 2014, by 25 percent.
Storage levels are now 13 percent less than a year ago and 12.1 percent less than the five-year average.
More moderate temperatures across the country prompted national natural gas use to decline 14 percent week over week, according to the EIA. Natural gas used for power generation decreased 10 percent week over week.
Prices responded, with Henry Hub gas spot values plummeting $1.18 to $3.24/MMBtu between Jan. 4 and 11. Hubs had dipped even lower between Jan. 4 and 9. The benchmark hub, for example, traded at $2.91/MMBtu on Jan. 9, but picked up 33 cents between Jan. 9 and 11.
Western gas prices lost between 18 cents and 52 cents in Thursday-to-Thursday trading. Southern California Border gas fell the most at Western hubs, dropping 52 cents to $2.86/MMBtu.
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Regional daytime power prices tumbled as much as $13.95/MWh between Jan. 4 and 11. Mid-Columbia lost the most value, down $13.95 to $20.50/MWh. Peak power prices traded in a range from $20.50/MWh at Mid-C to $36.45/MWh at South of Path 15 by Jan. 11.
Western off-peak values followed suit, with prices falling between $8.95 and as much as $15.20. Mid-C lost the most value, down $15.20 to $14.85/MWh.
Power demand on the California Independent System Operator grid reached 29,158 MW Jan. 8, which was the week’s high.
Despite adverse weather conditions in California, there were no disruptions to power transmission reported. As with fires in the region, service to end users was affected in some areas.
What’s next: Damp, unsettled weather for the West Coast starts Jan. 15. Some areas may get several inches of rain, while more than a foot of snow is forecast for some mountain areas. Above-normal temperatures should persist across the greater Los Angeles area. –Linda Dailey Paulson.
Archives of the Western Price Survey for the past year are also available online.
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